"Last year, one of the better performers among the Magnificent 7 was Meta Platforms Inc. ( NASDAQ: META). But its third-quarter earnings report raised investor concerns about the company's massive capital spending on artificial intelligence initiatives. In addition, Meta said it planned to make significant cuts to the budget of its Reality Labs metaverse division in the coming year. The stock is down 13.6% since the quarterly report was released."
"Strong quarterly reports earlier in 2025 (despite a tax charge) had lent credence to the claim that Meta would continue to outshine its competitors over the coming year. The share price hit an all-time high of $796.25 back in August. The stock is still trying to recover from the pullback in November, and it is now up 4.9% year over year, underperforming the broader market."
Meta Platforms' third-quarter results raised investor concerns about heavy capital spending on artificial intelligence initiatives and prompted planned budget cuts to Reality Labs. Reality Labs generated $470 million in revenue in Q3 but recorded a $4.43 billion operating loss. The stock fell 13.6% after the quarterly report and remains up only 4.9% year over year, underperforming the broader market. Strong early-2025 quarterly reports and an August all-time high of $796.25 contrast with a November pullback. CEO Mark Zuckerberg's prior pivot to the metaverse and rebranding remain controversial while leadership shifts focus amid economic and market uncertainty.
Read at 24/7 Wall St.
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